Reform of the Temporary Work (Skilled) (subclass 457) visa program
29 May 2013
Reform of the Temporary Work (Skilled) (subclass 457) visa program – 1 July 2013
The Minister for Immigration and Citizenship announced on 23 February 2013 a proposal of reforms to the Temporary Work (Skilled) (subclass 457) visa program (‘the 457 visa program’) that will come into effect on 1 July 2013.
These proposed reforms are designed to address concerns of the integrity of the 457 visa program whilst minimising its potential adverse effects on businesses in Australia. The proposed reforms modify certain aspects of the application criteria, and provide the Department of Immigration and Citizenship (‘the Department’) and the Fair Work Ombudsman with greater capacity to investigate against improper use of the 457 visa program.
Referring to the 2013-14 Federal Budget, the application charge will increase from $455 to $900 from 1 July 20131. In addition, funding has been approved in supporting Fair Work Ombudsman to monitor compliance with sponsorship obligations.
Further detailed information on the proposed changes will be released closer to the 1 July 2013 date.
BACKGROUND
The 457 visa is one of many visa categories that are part of the Australia migration program. It assists employers in addressing skill shortages or vacancies by allowing qualified overseas workers to be recruited and enter into Australia on a temporary basis when no relevantly skilled Australians could be employed.
It was introduced in 1996 in recognition of the increased demand for skills in the Australian economy, and the international competition for a highly mobile and high skilled workforce.
Since its introduction there have been concerns of employers misusing the 457 visa program or that the existing program does not sufficiently test whether equivalently skilled Australians were available to be employed.
The existing program contains a number of protections to prevent Australian working conditions and standards from being undermined and overseas workers from being exploited. The Worker Protection Act 2008 introduced the current sponsorship framework to ensure that the incoming overseas worker will receive pay and conditions that are at least what Australians performing equivalent work would receive.
However, the Department indicated that the 457 program has expanded well above the national employment growth rate as well as a significant growth in 2011-12 from applicants applying in Australia who held a working holiday visa or student visa.2 In addition, the number of infringement notices issued by the Department to sponsors of 457 visas increased from 9 in 2010-11 to 49 in 2011-12.3The Department believes that this trend suggests that the 457 program is increasingly used by temporary visa holders seeking to remain in Australia instead of supplementing the Australian labour force.4
It is on this basis that the changes and new measures were proposed and will come into effect on 1 July 2013. Refer to diagram below for details on the changes and new measures.
IMPLICATIONS
These proposed reforms will amend sponsorship obligations, and increase the Department’s regulatory capacity to ensure that the working conditions of sponsored 457 visa holders meet Australian standards and that valid 457 visa holders are not being exploited.
It is designed to ensure that the 457 visa program is only used for appropriately skilled workers and to fill genuine skill shortages in Australia.
Based on this recent announcement from the Department, the assessment criteria for 457 visa applications will become more stringent. From 1 July 2013, under the proposed changes potential sponsoring employers may have to provide evidence of a genuine need for skilled workers from overseas or show that they have made genuine attempts to employ Australian skilled workers with appropriate market rates and ongoing training requirements.
The 457 visa program, however, is a critical component of Australia’s compliance of a number of international trade obligations which prevents the Department from limiting access to the Australian economy by international corporations and people who wish to engage in business in Australia.
There is also increasing debate and opposition to these proposed changes in the media and from industry leaders and businesses which raises the possibility that these reforms may not come into effect or may come into effect in an amended form.
For international corporations operating in Australia, especially those from an Asia-Pacific Economic Cooperation (‘APEC’) member economy, it is yet to be seen how these proposed reforms from 1 July 2013 will affect corporate migration facilities such as intra-company transfers which streamline the processing of the transfers of executives, managers and specialists to Australia.
Further information from the Department on these proposed changes and new measures will become available closer to 1 July 2013, which will provide greater certainty on this issue.
The Minister for Immigration and Citizenship announced on 23 February 2013 a proposal of reforms to the Temporary Work (Skilled) (subclass 457) visa program (‘the 457 visa program’) that will come into effect on 1 July 2013.
These proposed reforms are designed to address concerns of the integrity of the 457 visa program whilst minimising its potential adverse effects on businesses in Australia. The proposed reforms modify certain aspects of the application criteria, and provide the Department of Immigration and Citizenship (‘the Department’) and the Fair Work Ombudsman with greater capacity to investigate against improper use of the 457 visa program.
Referring to the 2013-14 Federal Budget, the application charge will increase from $455 to $900 from 1 July 20131. In addition, funding has been approved in supporting Fair Work Ombudsman to monitor compliance with sponsorship obligations.
Further detailed information on the proposed changes will be released closer to the 1 July 2013 date.
BACKGROUND
The 457 visa is one of many visa categories that are part of the Australia migration program. It assists employers in addressing skill shortages or vacancies by allowing qualified overseas workers to be recruited and enter into Australia on a temporary basis when no relevantly skilled Australians could be employed.
It was introduced in 1996 in recognition of the increased demand for skills in the Australian economy, and the international competition for a highly mobile and high skilled workforce.
Since its introduction there have been concerns of employers misusing the 457 visa program or that the existing program does not sufficiently test whether equivalently skilled Australians were available to be employed.
The existing program contains a number of protections to prevent Australian working conditions and standards from being undermined and overseas workers from being exploited. The Worker Protection Act 2008 introduced the current sponsorship framework to ensure that the incoming overseas worker will receive pay and conditions that are at least what Australians performing equivalent work would receive.
However, the Department indicated that the 457 program has expanded well above the national employment growth rate as well as a significant growth in 2011-12 from applicants applying in Australia who held a working holiday visa or student visa.2 In addition, the number of infringement notices issued by the Department to sponsors of 457 visas increased from 9 in 2010-11 to 49 in 2011-12.3The Department believes that this trend suggests that the 457 program is increasingly used by temporary visa holders seeking to remain in Australia instead of supplementing the Australian labour force.4
It is on this basis that the changes and new measures were proposed and will come into effect on 1 July 2013. Refer to diagram below for details on the changes and new measures.
IMPLICATIONS
These proposed reforms will amend sponsorship obligations, and increase the Department’s regulatory capacity to ensure that the working conditions of sponsored 457 visa holders meet Australian standards and that valid 457 visa holders are not being exploited.
It is designed to ensure that the 457 visa program is only used for appropriately skilled workers and to fill genuine skill shortages in Australia.
Based on this recent announcement from the Department, the assessment criteria for 457 visa applications will become more stringent. From 1 July 2013, under the proposed changes potential sponsoring employers may have to provide evidence of a genuine need for skilled workers from overseas or show that they have made genuine attempts to employ Australian skilled workers with appropriate market rates and ongoing training requirements.
The 457 visa program, however, is a critical component of Australia’s compliance of a number of international trade obligations which prevents the Department from limiting access to the Australian economy by international corporations and people who wish to engage in business in Australia.
There is also increasing debate and opposition to these proposed changes in the media and from industry leaders and businesses which raises the possibility that these reforms may not come into effect or may come into effect in an amended form.
For international corporations operating in Australia, especially those from an Asia-Pacific Economic Cooperation (‘APEC’) member economy, it is yet to be seen how these proposed reforms from 1 July 2013 will affect corporate migration facilities such as intra-company transfers which streamline the processing of the transfers of executives, managers and specialists to Australia.
Further information from the Department on these proposed changes and new measures will become available closer to 1 July 2013, which will provide greater certainty on this issue.
If you have any enquiries or wish to receive further information, please contact:
Wentworth Lawyers & Partners
John Park
Executive Lawyer / Insolvency Practitioner / Registered Migration Agent
M +(61) 410 626 909 / Internet mobile 070 7884 7435 / T 1300 577 502 / E [email protected] / Level 13, 2 Park Street, Sydney NSW 2000 / www.wwlp.com.au
Disclaimer: This publication is intended only to provide a summary of the subject matter covered. It is not intended to be comprehensive or to provide legal advice. Consult a legal professional.
Wentworth Lawyers & Partners
John Park
Executive Lawyer / Insolvency Practitioner / Registered Migration Agent
M +(61) 410 626 909 / Internet mobile 070 7884 7435 / T 1300 577 502 / E [email protected] / Level 13, 2 Park Street, Sydney NSW 2000 / www.wwlp.com.au
Disclaimer: This publication is intended only to provide a summary of the subject matter covered. It is not intended to be comprehensive or to provide legal advice. Consult a legal professional.
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1 Australian Government, ‘2013-14 Federal Budget Paper no.2’, http://www.budget.gov.au/2013- 14/content/bp2/html/index.htm
2 Department of Immigration and Citizenship, ‘Strengthening the integrity of the 457 program’, http://www.immi.gov.au/skilled/strengthening-integrity-457-program.htm 3 Department of Immigration and Citizenship, Annual Report 2011-12, ‘Temporary Residents (economic)’, http://www.immi.gov.au/about/reports/annual/2011- 12/html/performance/outcome_1/temporary_residents_economic.htm 4 Department of Immigration and Citizenship, ‘Strengthening the integrity of the 457 program’, http://www.immi.gov.au/skilled/strengthening-integrity-457-program.htm |